Grundfreibetrag 2026: 12.348 Euro steuerfrei – was das für dich heißt

Up to a certain amount, your income stays completely tax-free – that's the basic personal allowance (Grundfreibetrag). For 2026 it rises to 12,348 euros, and that's more than a formality: the figure helps decide from which profit you pay income tax at all and how high your prepayments will be. In this article you get the new 2026 figures, the tax brackets under Section 32a of the Income Tax Act (EStG), and a clear read on what it all means for you as a self-employed person.

What is the basic personal allowance?

The basic personal allowance is the part of your taxable income on which no income tax is due. It protects the tax-free subsistence minimum – what the state has to leave you to live on before it takes anything. Only for each euro above this threshold does the tax start to run.

Important: the basic allowance is not something you have to apply for. It is built directly into the income tax schedule under Section 32a EStG. The tax office takes it into account automatically, whether you are an employee, a freelancer, or a trader.

For the self-employed, what counts is not turnover but profit – more precisely, taxable income. That is the profit from your cash-basis income statement (EÜR) or balance sheet, reduced by special expenses, provident expenses, and further deductions.

Basic allowance 2026: the new figures

On January 1, 2026, the basic personal allowance rises again. The increase offsets inflation and ensures the subsistence minimum stays tax-free.

• Basic allowance 2026: 12,348 euros (individual assessment)
• Basic allowance 2025: 12,096 euros – so the increase is 252 euros
• Joint assessment (marriage/registered partnership): 24,696 euros, double the amount

If in 2026 you earn less than 12,348 euros in taxable income as a single person, you pay no income tax under the schedule. If you are above it, only the excess part is taxed – not your entire income.

Tip: the basic allowance is an allowance (Freibetrag), not an exemption limit (Freigrenze). That means if you exceed it, you only tax the part above 12,348 euros. The first 12,348 euros always stay tax-free.

How the 2026 income tax schedule is structured

The German income tax schedule is progressive. That means: the higher your income, the higher the rate on each next euro. The schedule under Section 32a EStG is divided into several zones in 2026:

• Zero zone: up to 12,348 euros – tax-free, this is the basic allowance.
• Progression zones: above the basic allowance, the rate rises step by step from the entry rate of 14 percent up to 42 percent.
• Top rate of 42 percent: in 2026 it applies from a taxable income of 69,879 euros.
• Wealth tax rate of 45 percent: from 277,826 euros the highest rate applies.

The key distinction is between the marginal rate and the average rate. The top rate of 42 percent hits only the part of your income above 69,879 euros – not your entire income. Your actual average burden is therefore considerably lower than the top rate suggests.

What "cold progression" has to do with it

If your profit only rises to offset inflation, you have no more in real terms – yet because of the progressive schedule you slide into a higher tax burden. This creeping effect is called cold progression (kalte Progression). To cushion it, the legislator shifts the tax bracket thresholds for 2026 upward by around 2 percent. That's why not only the basic allowance rises, but also the thresholds at which the higher rates kick in.

Child allowance 2026: families benefit too

If you have children, the child allowance (Kinderfreibetrag) matters alongside the basic allowance. It too is raised in 2026:

• The child allowance for the child's material subsistence minimum rises by 78 euros in 2026 to 3,414 euros per parent.
• For jointly assessed parents the amount doubles accordingly to 6,828 euros.
• On top of this remains the allowance for care, upbringing, and education (BEA allowance).

Whether the child allowance or the child benefit paid out over the year works out better for you is checked automatically by the tax office in the so-called "more favorable" assessment (Günstigerprüfung). You don't have to decide yourself – you just list your children in the tax return.

What the 2026 basic allowance means for the self-employed

As a self-employed person, you feel the basic allowance in several places. Three points are especially relevant in practice:

• Income tax prepayments: the tax office sets your prepayments based on expected profit. A higher basic allowance and shifted bracket thresholds can mean your prepayments drop slightly. If business runs worse than planned, you can apply to have the prepayments reduced.
• Part-time self-employment: if you are self-employed alongside an employed job, all income is added together. The basic allowance is then usually already used up by your salary – your side profit is taxed from the first euro at your personal marginal rate.
• Founding year: especially in the first year the profit is often below the basic allowance. Then no income tax is due – but you still have to file the tax return including the EÜR.

Tip: don't confuse the basic allowance with the small-business regulation. The basic allowance concerns income tax, the small-business regulation under Section 19 UStG concerns VAT. Both apply independently of each other.

Example: how the basic allowance works

Jonas is a full-time self-employed graphic designer with a taxable income of 30,000 euros in 2026. The first 12,348 euros stay tax-free. Only the remaining 17,652 euros are taxed under the progressive schedule – starting at the entry rate of 14 percent, which grows as income rises. His average tax rate is therefore well below 42 percent, even though the top rate exists in theory. With 30,000 euros Jonas is still far from the top rate.

Keep taxes in view – we do the math with you

Basic allowance, bracket thresholds, prepayments: for proper tax planning you need to know where your profit lands in the schedule and which allowances apply. That's exactly what we take off your plate at Buchführungsheld. Real bookkeepers record your receipts, determine your profit cleanly, and keep an eye on whether your prepayments match your actual situation. You just upload your documents – we handle the rest for a fixed price. If you want to know what your 2026 tax burden realistically looks like, book a free initial consultation.

Frequently asked questions

How high is the basic allowance in 2026?

The basic allowance is 12,348 euros in 2026 for individually assessed taxpayers and 24,696 euros for jointly assessed couples or registered partnerships. Compared with 2025 (12,096 euros), that's an increase of 252 euros.

Do I have to apply for the basic allowance?

No. The basic allowance is firmly anchored in the income tax schedule under Section 32a EStG and is applied automatically by the tax office. You don't need to apply for anything separately.

From what income do I pay the top rate in 2026?

The top rate of 42 percent applies in 2026 from a taxable income of 69,879 euros. The highest rate of 45 percent (wealth tax) begins at 277,826 euros. Both rates hit only the part of income above these thresholds.

Does the basic allowance also apply to the self-employed?

Yes. The basic allowance applies to all taxpayers regardless of the type of income. For the self-employed, the profit or taxable income counts. If it is below the basic allowance, no income tax is due – but the tax return with the EÜR must still be filed.